Thousands of young Australian workers are expected to join an $85 million class action against the sales and marketing giant Appco Group Australia.

Key points:

Employees allege they were forced to roll and crawl on the floor

The humiliation rituals were allegedly punishment for arriving late or missing targets

Claimants allege pay was as little as $1,400 over seven months

The Appco Group claims to be the "largest face-to-face donor recruitment agency in the world" and raises funds for some of Australia's best known charities and sports organisations, including the Starlight Foundation, National Breast Cancer Foundation, Camp Quality and Surf Life Saving Australia.

Lawyers for the Appco employees, who collected donations and sold merchandise at shopping centres, malls and other public places, will allege they were grossly underpaid — on average, $6 per hour or one third of the minimum wage — and forced to work 80-hour weeks.

They will also allege employees were repeatedly bullied and shamed when they questioned their workplace rights. Employees say they were subjected to bizarre humiliation rituals when they were late for meetings or failed to meet daily sales targets.

These rituals included being forced to wear chicken suits and dance in front of colleagues, roll around on their backs while colleagues chanted "salmon" and crawl on the floor in another ritual called "the slug race".

Former employees will also allege that on road trips they would be forced to share single motel rooms, in groups of up to eight.

Mr Yates said Appco was taking advantage of young people entering the workforce.

"It's just pain. You're going to stand out there, you're going to be mentally taken advantage of, you're going to be physically taken advantage of, there's going to be days where you stand in the rain for eight, nine hours with wind, where no-one stops, where you make $6 a day for eight hours work," he said.

"You spend more on petrol getting to the site. You spend more on lunch than you make in a day."

Mr Yates said he was forced to perform both the salmon and the chicken dance.

"It was embarrassing having to do them and complete them in the first place. But if you didn't the repercussions were even worse. You're made to feel like you weren't part of the group if you didn't do these things and you were made to feel like you were by yourself if you went against their decisions," Mr Yates said.

"They'd put the fear into us and what they'd do is they'd go, they'd threaten us with losing our jobs, losing our form of income and at the end of the day, you'd get to that point when you're working at Appco and they're threatening you with this, and you realise it's a sales tactic.

"Why would I want to stay in a job that pays me $1,400 after seven months work? It's just ludicrous".

Employees slept on floor on work trip

Claimant Sonja Mamic, who worked for Appco in Sydney, said the company never booked enough accommodation for staff who were required to attend road trips every second week.

"The accommodation was usually booked for the smallest amount of people they could, usually about four people. But they'd often times send eight," Ms Mamic said.

"And there was one time when we were in Port Macquarie ... and the accommodation was booked for four people but there were eight of us going.

"So we had a guy sleeping on one of the couches, one guy sleeping on the floor, two guys in the bed and then four of us in single beds."

Lawyers will allege Appco engaged in "sham contracting" or sole trader arrangements, resulting in underpayment of wages and tax avoidance.

The class action in the Federal Court of Australia will also allege Appco operates an illegal pyramid scheme, whereby an employee's career progression is tied to recruitment of new members and the payment of fees to people higher up the pyramid.

Rory Markham, Director of Chamberlains Lawyers told the ABC he had already signed up 16 former Appco employees from Sydney, Melbourne, Perth and Canberra and expected that the class action would be joined by between 4,000 and 8,000 affected employees.

"Individuals were exploited, were asked to participate in humiliating activities, were made to feel bad for questioning basic employment entitlements," Mr Markham said.

"I imagine that will strike at the core of what we see as a fair society in this country and in doing that I hope that we learn as a society, and our young people particularly learn that sham contracting should have no place in our society."

He said they would also pursue Appco executives who made "extraordinary" profits from the scheme.

"We will allege that they were accessories that is, they knowingly participated, aided and abetted these management companies and others to basically extort, intimidate and otherwise underpay a class of between 4,000 and 8,000 individuals," Mr Markham said.

He said they would also allege that low-level employees were instructed not to complete tax returns until they reached more senior positions within the pyramid.

He said once they reached this level, they would be provided with a lawyer and accountant to handle their business, in exchange for a monthly subscription fee.

Appco denies sham contracting

Appco has been investigated before for pocketing at least $7 million of the $12 million it raised in donations for Special Olympics Australia.

In 2014, the NSW Office of Gaming and Racing announced it would investigate Appco's conduct of a gift voucher program on behalf of the Special Olympics charity, which runs sport for people with intellectual disabilities.

In a statement to the ABC, Appco said it did not directly engage independent contractors, but the companies it subcontracted to fundraise for its clients did.

The company denied it was involved in sham contracting and said it would not tolerate the practice, nor was it operating as a pyramid scheme.

Its independent contractors were self-employed, and so the hours they worked were up to them, it said. And it did not allow or condone bullying, intimidation or the ritualised humiliation of anyone.